CVS Health Corporation, incorporated on August 22, 1996, together with its subsidiaries, is an integrated pharmacy healthcare company. The Company provides pharmacy care for the senior community through Omnicare, Inc. (Omnicare) and Omnicare's long-term care (LTC) operations, which include distribution of pharmaceuticals, related pharmacy consulting and other ancillary services to chronic care facilities and other care settings. It operates through three segments: Pharmacy Services, Retail/LTC and Corporate. The Company delivers products and services by advising patients on their medications at its CVS Pharmacy locations; introducing programs for clients at CVS Caremark; delivering care to patients with complex conditions through CVS Specialty, and providing access to care at CVS MinuteClinic. As of December 31, 2016, the Company had more than 9,700 retail locations and more than 1,100 walk-in healthcare clinics.

Pharmacy Services Segment

The Pharmacy Services Segment provides a range of pharmacy benefit management (PBM) solutions to its clients consisting primarily of employers, insurance companies, unions, government employee groups, health plans, Medicare Part D plans, Managed Medicaid plans, plans offered on the public and private exchanges, other sponsors of health benefit plans and individuals throughout the United States. In addition, through its SilverScript Insurance Company (SilverScript) subsidiary, the Company operates as a national provider of drug benefits to eligible beneficiaries under the federal government's Medicare Part D program. The Pharmacy Services Segment operates under the CVS Caremark Pharmacy Services, Caremark, CVS Caremark, CarePlus CVS Pharmacy, CVS Specialty, Accordant, SilverScript, NovoLogix, Coram, Navarro Health Services and ACS Pharmacy names. As of December 31, 2016, the Pharmacy Services Segment operated 23 retail specialty pharmacy stores, 13 specialty mail order pharmacies and four mail order dispensing pharmacies, and 84 branches for infusion and enteral services, including approximately 73 ambulatory infusion suites and three centers of excellence, located in 41 states, Puerto Rico and the District of Columbia.

The Company's programs and services include Maintenance Choice, a program where eligible client plan members can elect to fill their maintenance prescriptions at its CVS Pharmacy retail stores; Pharmacy Advisor, a program that facilitates face-to-face and telephone counseling by its pharmacists to help participating plan members with certain chronic diseases, such as diabetes and cardiovascular conditions, to identify gaps in care, adhere to their prescribed medications and manage their health conditions; compliance and persistency programs designed to help patients to take their medications; enhanced disease management programs that are targeted at managing chronic disease states; Specialty Connect, its integrated specialty pharmacy offering, which integrates specialty mail and retail capabilities, providing members with disease-state specific counseling from its specialty pharmacists and the choice to bring their specialty prescriptions to a CVS Pharmacy location or submit it through its specialty mail order pharmacies, and an ExtraCare Health Card program, which offers discounts to eligible plan members on certain over-the-counter healthcare products sold in its CVS Pharmacy stores. The Company makes recommendations to its clients enabling them to design benefit plans.

The Company's formularies provide recommended products in various drug classes to enable members to access alternatives under the client's pharmacy benefit plan. The Company also assists employer, union and other health plan clients that qualify for the retiree drug subsidy by collecting and submitting eligibility and/or drug cost data to centers for medicare and medicaid services (CMS) in order for them to obtain the subsidy, and offers Medicare Part D pharmacy benefits to such clients' retirees through SilverScript-sponsored Employer Group Waiver Plans (EGWPs). As of December 31, 2016, the Company operated four mail order dispensing pharmacies in the United States. Its retail specialty pharmacy stores operate under the CarePlus CVS Pharmacy and Navarro Health Services names. As of December 31, 2016, the Company maintained a national network of more than 68,000 retail pharmacies, consisting of approximately 41,000 chain pharmacies (which include its CVS Pharmacy locations) and 27,000 independent pharmacies, in the United States, Puerto Rico, District of Columbia, Guam and the Virgin Islands. The Company dispenses prescription drugs both directly, through one of its mail order or specialty pharmacies, or through a network of retail pharmacies. It offers various utilization management, medication management, quality assurance, adherence and counseling programs.

The Company's Accordant programs include integrated rare disease management programs, which cover diseases, such as rheumatoid arthritis, Parkinson's disease, seizure disorders and multiple sclerosis. The Company offers a technology platform, NovoLogix, which is an online preauthorization tool that helps identify and capture cost savings opportunities for specialty drugs billed under the medical benefit by identifying outliers to dosages and costs. The Company operates and supports claim adjudication platforms to support its Pharmacy Services Segment. Its Health Engagement Engine technology and clinical algorithms enable its mail and specialty pharmacists to provide care, and its enterprise digital strategy and integrated digital offerings enable patients to manage mail, specialty and retail prescriptions. The Company provides pharmaceuticals to eligible members in benefit plans maintained by its clients and utilizes its information systems to enable performing safety checks, drug interaction screening and identifying opportunities for generic substitution.

Retail/LTC Segment

As of December 31, 2016, the Retail/LTC Segment included 9,709 retail locations (of which 7,980 were its stores that operated a pharmacy and 1,674 were its pharmacies located within Target Corporation (Target) stores), its online retail pharmacy Websites, CVS.com, Navarro.com and Onofre.com.br, 38 onsite pharmacy stores, its long-term care pharmacy operations and its retail healthcare clinics. As of December 31, 2016, its retail locations were located in 49 states, the District of Columbia, Puerto Rico and Brazil operating primarily under the CVS Pharmacy, CVS, CVS Pharmacy y mas, Longs Drugs, Navarro Discount Pharmacy and Drogaria Onofre names. The CVS Pharmacy retail drugstores sell prescription drugs and an assortment of over-the-counter and personal care products, beauty and cosmetic products, and general merchandise, which the Company refers to as front store products. The pharmacies within Target stores sell prescription drugs and over-the-counter drugs that are required to be held behind the counter. Omnicare also provides commercialization services under the name RxCrossroads. As of December 31, 2016, LTC consisted of 152 spoke pharmacies that primarily handled new prescription orders, of which 32 were also hub pharmacies that used automation to support spoke pharmacies with refill prescriptions. LTC primarily operates under the Omnicare and NeighborCare names.

Front store categories include over-the-counter drugs, beauty products and cosmetics, personal care products, convenience foods, photo finishing services, seasonal merchandise and greeting cards. The LTC operations include distribution of pharmaceuticals, and related consulting and ancillary services. Its clinics offer a range of healthcare services by nurse practitioners and physician assistants. As of December 31, 2016, it carried approximately 7,000 CVS Pharmacy and brand products. As of December 31, 2016, the Company operated 1,139 MinuteClinic locations in 33 states and the District of Columbia, of which 1,053 were located in its retail pharmacy stores, 79 were located in Target stores and seven were located in corporate campuses or other locations.

LTC's customers consist of skilled nursing facilities, assisted living facilities, independent living communities, hospitals, correctional facilities and other healthcare service providers. The Company provides pharmacy consulting, including monthly patient drug therapy evaluations, assists in compliance with state and federal regulations and provides clinical and health management programs. The Company also provides pharmaceutical case management services for retirees, employees and dependents having drug benefits under corporate-sponsored healthcare programs. The Company also operates small pharmacies located at client sites, under the CarePlus, CarePlus CVS Pharmacy or CVS Pharmacy name, which provide certain health plan members and customers with an alternative for filling their prescriptions.

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